This is why I want the financials. DSH mismanagement said October was a down month (then November also) but still had a hefty profit guidance...which they did later back away from. Although they had a lot of room to move plus Q3 was business as usual they said.
Did the banks act too quickly - yes, I think so.
Did the banks have the rights to do so - yes
The debt facilities is the key for me. I simplify this to say imagine if you have credit cards with max limits. DSH could not borrow against this for whatever reason so took on a NEW more onerous credit card (30m with Macquarie) and maxed it out without telling the market.
Then the original banks called them on it - which they have the right to do in law.
In the end, Australia, the Dick Smith name and shareholders will probably suffer the most.
I do not sleep well since this debacle but would be more concerned if I was on DSH's board.
DSH Price at posting:
35.5¢ Sentiment: Sell Disclosure: Held
